Hello Crypto Family,
Reading the charts and indicators is very important and helpful but without having a plan to manage your money, sooner or later you gonna lose money. It happens that you will find yourself on the wrong side of the trade and having the discipline to execute your plan (exiting the trade) is essential.
“The four most dangerous words in investing are: This time it's different.” - Sir John Templeton
Money Management
Reading the charts and indicators is very important and helpful but without having a plan to manage your money, sooner or later you gonna lose money. It happens that you will find yourself on the wrong side of the trade and having the discipline to execute your plan (exiting the trade) is essential.
“The four most dangerous words in investing are: This time it's different.” - Sir John Templeton
Money Management
- 1) Never trade on your assumptions / be ready to change your opinion:
We all like some Blockchain Projects more than others, but we are here to trade and make money. There are many interesting projects without liquidity and therefore not the best coin to trade. Never fall in Love with a Coin!
Only because you think the price is very low, it doesn't mean that we could go lower / Only because we made x% up, it doesn't mean that we will reach all-time highs.
Don't try to catch the falling knife, wait for the Volume and breakout. But once the confirmation is there, and it is not what you have expected, you need to change your mind very quickly and adapt, otherwise you will enter the market when others are already taking profit or when the market is crashing, you will sell your position with loses.
“Everyday I assume every position I have is wrong.” – Paul Tudor Jones
- 2) Keep your emotions under control and never FOMO:
Be aware, how much risk you are risking and what is the potential reward. Right now we don't have a reasonable Risk/Reward ratio to be invested in BTC. The safest way to trade is to stay on the sideline an wait for BTC to break the Support Line (Move Downside) or push above resistance Line. Missing on small moves isn't significant because you can always catch the wave 3.
Never get emotional and invest 100% of your position, by laddering in / out, you reduce your risk of a bad entry point by having a good average price entry. And if you make a bad trade you don't lose all your money. It's like playing in multiple lotteries.
“Frankly, I don’t see markets; I see risks, rewards, and money.” – Larry Hite
- 3) Reward yourself:
If you have a successful trade, start cashing out your gains. Let's say you have made 100%, you could cash out your initial investment and leave the rest invested and play with the "house money".
“Don’t focus on making money; focus on protecting what you have.” – Paul Tudor Jones
